EU Investigating Palestinian Authority

Published 7:00 pm, Tuesday, February 4, 2003

Associated Press Writer

The European Union's anti-fraud office said Wednesday it was investigating the Palestinian Authority's use of EU-donated funds.

The office, known by its initials OLAF, said that there were allegations that some funds were being used for terrorist purposes. But it gave no other details except to say the probe was based on "information received … in recent months from a number of different sources."

The announcement came a day after a group of EU lawmakers asked the European Parliament to launch its own inquiry into how EU funds for Palestinian leader Yasser Arafat's government are being used.

OLAF spokesman Alessandro Buttice said the inquiry has been going on for several months. "We decided to announce it publicly after media reports that an investigation was underway," he said.

If OLAF uncovers fraud or financial mismanagement, it will try to recover the money and may provide the EU or national governments with information that could lead to administrative or criminal prosecutions against individuals.

On Tuesday the EU head office said there was nothing awry in how the Palestinian Authority uses EU money to meet the payroll of its 125,000 or so employees.

Last year, according to EU figures, the Palestinian Authority operated on a budget of $90 million a month _ $56 million of went to wages. The EU says it has been providing the nearly $11 million a month to help meet salary costs.